By Colin Kellaher

 

NVIDIA Corp. on Monday said its fiscal second-quarter sales would fall well short of expectations amid a steep drop in gaming revenue, and the graphics-chip maker said it would post more than $1.3 billion in charges for inventory and related reserves based on reduced expectations of future demand.

The Santa Clara, Calif., company said it expects to report revenue of $6.7 billion for the quarter ended July 31, some 17% below the $8.1 billion it had forecast in May, amid a 33% drop in gaming revenue to $2.04 billion.

Analysts polled by FactSet, on average, were expecting total revenue of $8.12 billion and gaming revenue of $3.09 billion.

NVIDIA said it believes reduced channel partner sales due to macroeconomic headwinds led to lower sell-in of gaming products during the quarter. The company added that it implemented pricing programs with channel partners to reflect challenging market conditions that it expects to persist into the third quarter.

NVIDIA said the $1.32 billion in charges it will book reflect long-term purchase commitments it made during a time of severe component shortages and its current expectation of ongoing macroeconomic uncertainty.

Shares of NVIDIA, which is slated to report its quarterly results on Aug. 24, fell 6.4%, to $177.62, in premarket trading Monday.

 

Write to Colin Kellaher at colin.kellaher@wsj.com

 

(END) Dow Jones Newswires

August 08, 2022 09:37 ET (13:37 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.
NVIDIA (NASDAQ:NVDA)
Historical Stock Chart
From Sep 2022 to Oct 2022 Click Here for more NVIDIA Charts.
NVIDIA (NASDAQ:NVDA)
Historical Stock Chart
From Oct 2021 to Oct 2022 Click Here for more NVIDIA Charts.